China Railway Construction to buy controlling stake in Spain’s Aldesa

31 December 2019 - 12:00 am UTC

China Railway Construction Corporation (CRCC) will buy a controlling stake in a distressed Spanish infrastructure and renewables construction firm in its maiden brownfield acquisition in Europe.

The Chinese state-owned builder’s subsidiary, CRCC International Investment, signed an agreement to subscribe to about EUR 250m (USD 280m) of equity shares for a 75% stake in Madrid-based Grupo Aldesa, which is owned by the Fernandez Rubio family, a spokesperson for the Chinese firm told Inframation.

The Spanish family will retain a 25% stake in the company and will continue to oversee the management of Aldesa, which boasts of infrastructure and renewables projects not only in Europe but also in Spanish-speaking Latin American countries including Mexico and Peru.

The transaction is pending approval from regulators from both countries, including Spain’s National Commission of Markets and Competition.

Aldesa, which in July hired Alantra to renegotiate with creditors to refinance its EUR 250m bonds due in 2021, saw the price of the securities plunge by as much as 65% of their nominal value in September due to a downward revision of its earnings forecast.  

Although major creditors Banco Santander, Banco Sabadell and Bankia had agreed to extend a credit line to avoid a possible liquidation of the company, they later turned down a proposal from Alantra requesting a repurchase of these bonds at a 35%-40% discount by granting the company an additional EUR 160m loan, according to Inframation’s sister publication Debtwire.

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